Although Ukraine is not a major drug source country, its location astride several important drug trafficking routes into Western Europe leaves it vulnerable as an important transit country. Ukraine’s numerous ports on the Black and Azov seas, its extensive river routes, and its porous northern and eastern borders make Ukraine an attractive route for drug traffickers into the European Union’s (EU) illicit drug market. Heroin from Afghanistan is trafficked through Russia, the Caucasus, and Turkey, before passing through Ukraine. Latin American cocaine is moved through Ukrainian seaports and airports for both domestic use and further transit to EU countries. Ukrainian law enforcement occasionally interdicts large shipments of drugs in commercial shipments transiting southern ports. Usually, however, drugs are found in small quantities, ranging from several grams to several hundred grams. Russian aggression in eastern Ukraine, including arming, training, and fighting alongside separatists, has created a new vulnerability for drug transit through the region. The use of synthetic drugs and psychotropic substances, especially amphetamine-type stimulants, has been rapidly increasing in Ukraine over the past decade, following international trends. Synthetic drugs are trafficked to Ukraine primarily from Poland, Lithuania, and the Netherlands, but they are also produced locally in small clandestine labs. Most domestic drug abuse, however, continues to be focused on drugs made from illicit drug crops (cannabis and opium poppy) grown in the region. These account for more than 90 percent of the total drug market in Ukraine. In most instances, these drugs are either locally produced or supplied from Russia and Moldova. During the first 10 months of 2018, Ukrainian law enforcement agencies (National Police of Ukraine, or NPU) reportedly detected and disrupted 37 international drug trafficking routes, dismantled 115 clandestine labs, and eliminated 63 organized criminal drug trafficking groups. Approximately 3.89 metric tons of narcotics, psychotropic drugs, and other controlled substances were seized, including 38.9 kilograms (kg) of cocaine and 32 kg of psychotropic drugs. Source: International Narcotics Control Strategy Report, U.S. Department of State. https://www.state.gov/wp-content/ uploads/2019/04/INCSR-Vol-INCSR-Vol.-I-1.pdf, 2019, p. 264
18
regions as well as Kyiv. In the western areas, they are reported to be in the Transcarpathian, Volyn, Lviv, and Rivne regions. In the south, the principal hub is Odesa.97 The source of this information, however, has been questioned. New trends of buying drugs online may become a concern.98 Online drug trafficking is, for the moment, evolving faster than the tools to fight it; cyberspace provides anonymity both for buyers and sellers, and the ease of purchase through a click on a smartphone are simplifying, expediting and expanding the market. Traffickers use hard-to-detect “contactless” (no contact between them and the buyers) methods such as sending drugs contained in small parcels or leaving the package in a location which the buyer is instructed to later collect.99 Drug trafficking is highly profitable for organised crime groups in Ukraine. In March 2019, the Ukrainian police seized over half a tonne of heroin with an estimated worth of USD 60 million in separate investigations. During the same month, the Security Service (SBU) seized USD 51 million worth of cocaine in a South American cargo ship docked in the seaport of Odesa.100 In 2018, the NPU counter-narcotic units facilitated indictments of 63 drug trafficking syndicates.101 In the same year, Ukrainian courts also ordered the seizure of assets valued at some UAH 72 million.102
Smuggling Smuggling of goods, such as cigarettes and alcohol, also generates a large amount of IFFs in Ukraine; one-third of Ukraine’s external trade is reported to be the result of smuggling.103 According to the 2019 NRA report, the volume of potential smuggling in 2018 was estimated to be between UAH 209 to 311 billion annually, with respective national budget revenue loss of UAH 63 to 93 billion per year.104 Similarly, Ukrainian authorities report large-scale smuggling of various commodities arriving from the EU. For example, exports from Poland to Ukraine are frequently reported to be almost 30% higher than imports arriving from Poland,105 suggesting that sophisticated smuggling networks are deeply involved.106
Illicit Financial Flows and Asset Recovery In Ukraine
